Haines Watts | Making Tax Digital has been delayed by HMRC until April 2026

The Financial Secretary to the Treasury, Victoria Atkins issued a ministerial statement yesterday (19 December), announcing Making Tax Digital (MTD) has been delayed until April 2026.

The change in timescales has been welcomed by professional bodies such as the Chartered Institute of Taxation (CIOT) who recently published the results of their survey of tax professionals showing there was a need for a delay. As well as the HMRC Administrative Burdens Advisory Board (ABAB) who were also reporting concerns about the timeframes for introducing the MTD measures.

The ministerial statement set out adjustments to the scope and timing phases of MTD Income Tax Self-Assessment (ITSA):

• A two-year delay until April 2026 for mandatory MTD ITSA filing.
• Businesses, Self-employed individuals and landlords with income over £50,000 to be enrolled first.
• Those earning more than £30,000 mandated to join the scheme in 2027.
• The situation for landlords and sole traders earning less than £30,000 will be reviewed at a later dated to see if MTD ITSA can be shaped to meet the needs of smaller businesses.
• Partnerships will not be brought into MTD for ITSA as previously planned in 2025 and the joining date is also yet to be confirmed
• Points-based penalty system to be extended to MTD ITSA filers when they join. 

The Minister stated that “It is right to take the time to work together to maximise the benefits of Making Tax Digital for small businesses by implementing the change gradually. It is important to ensure this works for everyone: taxpayers, tax agents, software developers, as well as HMRC.

Smaller businesses in particular should be able to experience the benefits of increased digitalisation of Income Tax in a way which meets their needs. That is why we are also today announcing a review to establish the best way to achieve this.”

To maximise the benefits of MTD for small business, the government opted to allow more time to prepare, “so that all businesses, self-employed individuals, and landlords within scope of MTD for Income Tax, but particularly those with the smallest incomes, can adapt to the new ways of working.”

You can read further details about the phased introduction of MTD for ITSA in the HMRC press release Government announces phased mandation of  MTD ITSA.

To many involved in UK tax, it seems like we’ve been here before. The last time the Treasury faced such a unified chorus was last year, when the previous FST Lucy Frazer announced a 12-month delay to the timetable in September 2021.

If you want to discuss how the changes will affect your business, please start a conversation with us.  We can advise you on what changes will be required and when. 

Contact your local Haines Watts office today at Derby or Nottingham. 

Further information on the topic can be found here:

The Chartered Institute of Taxation (CIOT) and Association of Taxation Technicians (ATT) Welcome delay to compulsory digital tax reporting

Results of a survey of tax professionals carried out by CIOT and the Association of Taxation Technicians in December 2022 can be read here Making Tax Digital for Income Tax Self-Assessment – CIOT and ATT survey